UK: The Final Score On Football Law

Last Updated: 25 February 2015
Article by Daniel Geey

Introduction

Last Tuesday came the news that Sky and BT had been awarded the latest domestic rights to show live Premier League matches for three years from the 16-17 season onwards. The £5.14bn figure, which equated to another 70% increase in rights fees, was headline news and is summarised below. Sky will pay £4.176bn for 126 games which is an increase from the £2.3bn it paid at the last auction for 116 matches. BT has four more games (42 matches per season) than its current deal and will pay £960m over the three years of its deal. It previously paid £738m for 38 matches per season. In addition, the Premier League announced that the BBC had been successful in bidding for the iconic Saturday night UK Match of the Day highlights show for £204m.

Summary Premier League UK Live Rights Table

Broadcaster Total 16/17-18/19 amount paid (£) Total Amount Per Season Total Per Game (£) Number of Matches Percentage Increase on the Previous Deal Number of Packages Won Previous Amount Paid (£)
Sky 4.176bn 1.392bn 11m 126 83% 5 2.3bn
BT 960m 320m 7.6m 42 18% 2 738m

It is worth bearing in mind that the £5bn+ figure solely relates to the Premier League's domestic market. In the previous tender, the global figure was rumoured to be around £5.5bn. With the domestic deal getting close to eclipsing that figure, and the global appeal of the Premier League continuing to grow, there may well be strong competition in a number of key markets including Asia and the US which may push the latest global price north of £8bn.

Context

Prior to the last auction, Sky was very much the leading broadcaster for live UK Premier League rights. It had previously seen off challenges from new entrants Setanta and ESPN and going in to the 13/14-15/16 auction cycle process, there were few (if any) whispers that BT would enter the market. The result of the auction surprised many with a 70% increase (to £3.1bn) on the previous £1.7bn 10/11-12/13 auction cycle that ESPN and Sky had won.

Historical Premier League UK Live Rights Table

Year 1992-1997 1997-2001 2001-2004 2004-2007 2007-2010 2010-2013 2013-2016 2016-2019
Amount (£) 191m 670m 1.2bn 1.024bn 1.706bn 1.773bn 3.018bn 5.14bn
Total Cost per match (£) 0.6m 2.5m 5.6m 2.5m 4.1m 4.3m 6.5m 10.3m
Number of Games 60 60 106 138 138 138 154 168
Broadcaster(s) Sky Sky Sky Sky Sky/Setanta Sky/ESPN Sky/BT Sky/BT

 

The degree of competition for the packages in the last two auctions has been significantly fiercer between two broadcasters with very deep pockets ramping up the price. In a number of ways, BT's purchase of live rights was seen by many analysts as a next step to get top premium content on its platforms and protect its own broadband offering. BT initially hoped that acquiring two packages would act as its own 'battering ram' to further its own cross-media, bundled internet offering. By retaining two packages, BT's UK focused football offering becomes stronger still with exclusive Champions League/Europa League matches from next season, FA and Premier League matches too.

Strategically, competition between BT and Sky for live Premier League matches has become a battleground for larger consumer offerings. With Sky entering the mobile market from next year and BT acquiring EE, live premium sports rights are seen as one of the core drivers for new bundled quad-play consumer offerings. Whereas at present, BT incentivises its customers to take its broadband offering through marketing its BT Sport channels for free, Sky conversely offers free broadband if consumers sign up to its premium TV channels. Both will therefore soon join Virgin and TalkTalk in being able to offer 'quad-play' packages for broadband, mobile, Pay-Tv and phone line rental services.

The Consequences for Sky

It was no doubt crucial for Sky to win the majority of the live UK Premier League rights. As can be seen from the table above, Sky has paid almost double its previous outlay to secure the five packages. It retained its prime Super Sunday and Monday night football slots as well as being the first broadcaster to screen a number of live, regular fixture Friday night matches too. It also has 26 first picks and 31 second picks of matches per season so it can show more of the best matches throughout the season. It would have been disastrous for Sky to have lost the majority of the live rights at a time when BT has won exclusive Champions League and Europa League rights at the expense of Sky and ITV. The question now will be whether Sky's consumers bear the cost burden by way of higher subscriptions due to their increased expenditure.

What it means for BT

BT has certainly consolidated its football broadcasting position. It pulled off a large coup by paying around three times (almost £900m) what ITV and Sky previously paid for UEFA Champions League and Europa League matches. That coupled with exclusive FA Cup and Premier League matches puts BT right at the heart of a comprehensive football offering which also includes Bundesliga, Serie A and Ligue 1 rights. At present, BT gives away its BT Sport channel to its own broadband subscribers and charges its non-broadband customers. BT's next presumed step will be a combination of charging its existing broadband customers to watch BT Sport and perhaps increasing the subscription charges further for non-broadband customers. Whilst BT Sport has around five million customers, it remains to be seen whether those that have the current 'free BT Sport with your broadband deal' will pay to watch the BT Sport channel that they previously received for free.

Virgin in the Mix

Prior to the auction announcement, Virgin Media who purchases Sky Sports and BT Sports on a wholesale basis from its rivals to sell on to its own retail customers had complained to Ofcom that the collective selling of live Premier League rights breached competition law. Such claims related to the number of Premier League matches made available being lower than in other European leagues, where more live matches are sold. Virgin argue that the exclusive provisions in the Premier League auction process significantly raise the price broadcasters have to pay and that as a result British subscribers pay too much money to access premium content as costs are passed on by way of higher prices. Virgin argue that they are priced out of the auction process and want for structural changes in the way the Premier League rights are sold and how the auction is carried out. Expect a preliminary view from Ofcom in March. With the auction now finalised it will be interesting to see what happens to the latest deal if Ofcom sides with Virgin.

A Windfall for the Clubs

As a result of the current 13/14-15/16 £5.5bn global auction, the amount that was centrally distributed to the 20 Premier League clubs significantly increased. This was predominantly because of the latest broadcasting deal. By way of example, in the last year of the previous £1.7bn television deal, Manchester United in the 12/13 season received £60.8m for winning the league. Such was the uplift that in the next season (13/14) Cardiff received more for finishing bottom (£62.1m) than United did for winning the league the year before. Indeed, although Liverpool finished second, they received £97.5m which was the highest ever centrally distributed amount. As such, for the teams in the Premier League come the 16/17 season, it is likely the winner of the Premier League could earn around £140m+ with the bottom club earning £90m+. Similarly, clubs that are relegated from the Premier League will benefit from larger parachute payments too.

Conclusion

The next steps in the Premier League broadcasting story are going to be as fascinating as ever. Two very large companies will likely continue to bid huge amounts for live Premier League matches as part of their overall strategic offering to consumers. With BT and Sky soon able to offer a comprehensive package of Pay-Tv, broadband, line rental and mobile/data services, such live rights, which were once a battering ram for satellite subscriptions, are now part of a core communications offering to entice quad-play consumers and protect core markets. With the Virgin complaint and Ofcom investigation into the auction process a live issue, there are a number of regulatory uncertainties for the Premier League and its member clubs to face in the coming months. Nonetheless, the focus at present is quite rightly on the monumental sum paid by BT and Sky for the live rights and the benefits that such a deal will have for clubs.

www.danielgeey.com
www.twitter.com/FootballLaw

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Daniel Geey
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.